Stocks Mixed as Investors Weigh Trade Prospects: Markets Wrap




 

(Bloomberg) -- European stocks sank and U.S. equity futures edged lower while Asian shares rose broadly as investors digested signs of progress in U.S.-China trade negotiations. European bonds advanced.

Mining and banking shares led Monday's decline in the Stoxx Europe 600 index after the gauge jumped the most since January on Friday. Equities climbed from Sydney to Hong Kong, helping sustain a rally in emerging-market assets, after President Donald Trump said the two sides agreed to the outlines of a partial deal that could be signed as early as next month. S&P 500 futures turned lower, signaling the U.S. equities gauge may struggle for gains after rising to within 1.8% of a record close Friday.

The yuan advanced for a fourth day offshore. Treasury futures climbed, with the market for cash bonds closed for American and Japanese holidays.

The limited agreement outlined by China and the U.S. kept prospects alive for a comprehensive trade deal and provided an initial boost to risk assets, though skepticism continues to cloud markets and the outlook for global growth. Beijing will make large agricultural purchases and take steps on intellectual property, financial services and the yuan. A Chinese statement didn't refer to a deal, saying only that "the two sides have made substantial progress."

"Let's not get carried away," said Raoul Leering, head of international trade research at ING Bank NV. "There is a very tough journey ahead for the U.S. and Chinese negotiators to cut a deal that really has substance."

China's exports and imports shrank more than expected in September, as existing U.S. tariffs and the ongoing slowdown in global trade combined to undercut demand. Focus will soon turn to earnings season that begins with big U.S. banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley.

Elsewhere, the pound retreated after rocketing for the past two sessions as European Union negotiators warned that Brexit plans from U.K. Prime Minister Boris Johnson are not yet good enough to be the basis for an agreement. Turkey's stock market and currency fell as the U.S. and Europe increased threats to impose sanctions over the incursion into Syria. And crude oil dropped after surging the most in almost a month on Friday.

Here are some key events coming up this week:

The International Monetary Fund and World Bank host meetings to discuss economic development and finance.St. Louis Fed President James Bullard speaks at Bloomberg's monetary and financial policy conference in London. Riksbank Governor Stefan Ingves also speaks there. Atlanta Fed President Raphael Bostic speaks in Atlanta. San Francisco Fed President Mary Daly gives a speech in Los Angeles.Wednesday brings a monetary policy decision in South Korea.U.S. retail sales are forecast to increase for a seventh straight month. Sales in the "control group" are also expected to rise. Consumer spending is carrying the weight of U.S. economic growth so the data will be monitored closely for any signs of slowing.China releases third-quarter GDP, September industrial production and retail sales data on Friday.

Here are the main moves in markets:

Stocks

The Stoxx Europe 600 Index declined 0.7% as of 9:32 a.m. London time.Futures on the S&P 500 Index fell 0.1%.Germany's DAX Index dipped 0.6%.The U.K.'s FTSE 100 Index decreased 0.4%.

Currencies

The Bloomberg Dollar Spot Index advanced 0.2%.The British pound sank 0.8% to $1.2572.The euro dipped 0.2% to $1.1025.The offshore yuan strengthened 0.2% to 7.0699 per dollar.

Bonds

Germany's 10-year yield fell three basis points to -0.47%.Britain's 10-year yield sank seven basis points to 0.634%.Spain's 10-year yield sank four basis points to 0.198%.

Commodities

West Texas Intermediate crude decreased 0.9% to $54.21 a barrel.Gold advanced 0.1% to $1,489.83 an ounce.Iron ore sank 1.7% to $86.90 per metric ton.Carbon-emissions contracts declined 2.2% to 23.91 euros per ton.

--With assistance from Sophie Caronello, Mark Tannenbaum and Adam Haigh.

To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Robert Brand

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.

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